I agree to TechTarget’s Terms of Use, Privacy Policy, and the transfer of my information to the United States for processing to provide me with relevant information as described in our Privacy Policy.

Please check the box if you want to proceed.

I agree to my information being processed by TechTarget and its Partners to contact me via phone, email, or other means regarding information relevant to my professional interests. I may unsubscribe at any time.

Please check the box if you want to proceed.

By submitting my Email address I confirm that I have read and accepted the Terms of Use and Declaration of Consent.

CEO Charles Giancarlo will steer the all-flash array vendor in a different direction.

Giancarlo became the CEO of Pure Storage in August following the surprise resignation of Scott Dietzen. By all accounts, the decision to step down was Dietzen's alone; he built Pure from a venture-backed fledgling in 2009 to a public company with the third-highest all-flash market share, according to IT analyst firm IDC.

Giancarlo takes over as Pure Storage CEO with an extensive track record as an IT executive. Giancarlo worked at Cisco from 1994 to 2008, serving variously as executive vice president, chief development officer and president of its Linksys division. He later served as interim CEO of telecom giant Avaya, and as a managing partner at equity firm Silver Lake Partners.

Giancarlo has yet to publicly disclose specific plans to grow revenue as the Pure Storage CEO.

Charles Giancarlo

Danh Duong, lead storage and backup administrator at the University of California, Davis, said he expects little impact from the Pure Storage CEO change. And that would be fine with him. UC Davis uses Pure Storage's FlashArray as the data repository for an internal private cloud for managed services.

"We've always been very happy with Pure support," Duong said. "They've made our storage management extremely easy, which is what we wanted. As long as the core management team is there and they don't change their licensing and support, I don't have any concerns about the CEO change."

Jack Hogan, CTO of women's health website Lifescript, said he was surprised when Dietzen stepped down Aug. 24. Hogan said Dietzen assuaged his concerns during a personal conversation, and he is encouraged that Dietzen will stay on as Pure's chairman.

"I think if Scott were gone completely from Pure, the culture he built could erode," Hogan said. "But the fact he's staying around as chairman -- the leader who says 'always do the right thing' -- almost gives him more power" to influence Pure's future.

"It's not just Scott, but the entire top-level executives all the way down that do a good job of instilling a culture of putting the customer first," Hogan said. "It's a do-the-right-thing approach that we've seen handfuls and handfuls and handfuls of times.

Analysts: What's next after Pure Storage hits $1 billion?

Eric Burgener, a research director for storage at IDC, said tech companies commonly swap CEOs as they move from one phase of growth to another. For Pure, the $1-billion plateau marks a demarcation point.

Pure reported $407 million in revenue for the first half of 2017, and company executives project enough growth in the second half to crack $1 billion for the full year.

"One thing you hear consistently from the venture capital community: the CEO that gets you from zero to $1 billion in revenue is usually not the same CEO that gets you to $10 billion. From that point of view, Scott's work (as CEO) at Pure is over," Burgener said.

Pure's revenue growth has been mitigated by huge losses, but its executives predict the flash pioneer will show a profit this year. Most of the revenue so far has come from its FlashArray, with its newer FlashBlade big data storage platform starting to pick up steam.

Giancarlo faces the task of sustaining profitability by scaling Pure Storage revenue into the multibillion-dollar range.

"That's going to be a challenge," Burgener said of the next step. "Pure is not going to reach $10 billion in revenue only by selling FlashArray. They have told me that FlashBlade will account for just under $100 million in revenue for this fiscal year. That's a great start, but Charlie needs to be very successful in continuing to sell FlashArray, FlashBlade, and perhaps introducing new platforms to go after other markets."

Although it is growing rapidly in primary storage systems, about half of organizations do not yet deploy flash in the data center, according to Enterprise Strategy Group, based in Milford, Mass. Among enterprises that use flash, it often remains a small subset of their overall capacity, ESG storage analyst Scott Sinclair said. That leaves considerable room for Pure Storage to boost revenue by selling more storage.

"One big question for the new CEO to answer is how to expand on net-new opportunities," Sinclair said. "We are seeing the emergence of different buying personas within IT. The majority of buyers still want to buy storage infrastructure and build it into a data center. But we're also seeing more and more customers that want to offload those responsibilities. Pure may want to decide if it wants to take advantage of that trend."

Positive cash flow first, acquisitions could follow

Pure has started to expand the software features on FlashArray and FlashBlade models, most recently adding predictive storage analytics and multisite replication. It also has notched data protection partnerships with Cohesity, Rubrik and Zerto.

Having more integrated features could boost Pure Storage revenue by enabling it to better compete with established storage vendors, said Henry Baltazar, a research director for storage at 451 Research in San Francisco.

"There are going to be a lot of asset sales" because failed startups don't get funding, he said. "There probably will be a lot of decent technology available that Pure could use to fill some gaps and leverage its portfolio.

"While Pure has made a great effort to expand in all-flash, it's basically a two-product company. Right now, Pure covers an important part of the market, but it's not the whole market."

Join the conversation

1 comment

Register

I agree to TechTarget’s Terms of Use, Privacy Policy, and the transfer of my information to the United States for processing to provide me with relevant information as described in our Privacy Policy.

Please check the box if you want to proceed.

I agree to my information being processed by TechTarget and its Partners to contact me via phone, email, or other means regarding information relevant to my professional interests. I may unsubscribe at any time.